RBS job cuts: 20000 to go

Royal Bank of Scotland executives will announce a huge round of job cuts next week that will take staffing levels to their lowest in many decades. The amount of RBS jobs cut could exceed 20,000 as the bank tries to balance its books to boost its capital and ultimately return to profitable trading.

The numbers being mentioned suggest that a sixth of the firm’s 120,000 workforce will be cut during 2014 as RBS attempt to get back into the black. The job cut announcement is expected to come from chief exec Ross McEwan in next Thursday’s address. As well as the major cuts, McEwan is also expected to reveal RBS’s plans to close its US based investment banking business and to cut back its involvement in the Asian banking sector.

McEwan’s predecessor Stephen Hester, who quit his post in September 2013, resisted such major changes to the firm’s portfolio even though the Chancellor George Osborne has always been clear in his wish that RBS focus their attention on banking in the UK.

Internal sources suggest that McEwan’s proposal, which is codenamed Project Cook, will help the firm pay for upgrades to its aging IT infrastructure. Recent glitches have caused customers to lose control over their money. RBS will be looking for a system which increases automation to allow the company to compete with rivals like Santander and Barclays, both of which have spent billions improving their platforms for better online and mobile banking services.

If these staffing cuts through, they will see the business, which once employed 161,000 people before the 2007 / 2008 financial crisis hit, cut its workforce to less than 100,000 for the first time since RBS took over NatWest in 2000.